Traditionally, when cranky old-timers wanted to vent their disgust at the younger generation, the cry was “bring back national service!”.
Little need for that now. The ‘war on youth’ has taken on subtle, but more devastating forms – a suite of attacks once again served up in the 2017 budget.
The first and biggest attack is to continue using tax dollars to subsidise housing speculators to outbid first home buyers.
The government’s ‘housing affordability’ measures in the budget are only tweaks to that system, and mostly ignore the large tax distortions of negative gearing and the capital gains tax discount laws.
The new ‘First Home Super Saver Scheme’ does nothing to change that imbalance. It offers tax breaks on savings up to $30,000 to be used as a deposit on a home.
However, under the microscope, it is just a ‘first home owner grant’ in disguise – a chunk of tax dollars given to home buyers that will add to demand-side pressures and push prices higher still.
The policy has sucked in some journalists, though it is not fooling young Australians themselves.
Caitlin Figueiredo, who fronted a Parliament House media conference on Wednesday on behalf of the Australian Youth Affairs Coalition, told me the refusal to enact real housing reform “is scaring us, because it feels like we don’t have a future”.
She pointed out that a small chunk of tax assistance within the new $30,000 savings account “won’t even make a dent in the problem, when the cost of a deposit is at least four to six times that amount”.
She’s right. Prices have reached record levels because for every extra chunk of money a first home buyer has, investors are incentivised to borrow and bid a little bit more.
Degree of pain
The second attack on young Australians is in tertiary education.
University funding is being cut 2.5 per cent in each of the next two years, fees are being increased a cumulative 7.5 per cent over four years, and student ‘loan’ repayment thresholds are being lowered from $55,000 to $42,000.
As covered previously, ‘student loans’ is a misnomer. They are in reality a co-investment by the government to create the right skills base for future economic growth.
But the signal in this budget is clear: put up with larger class sizes and less resources, pay more for the privilege, and start paying back your loan when you’re struggling to pay the rent.
Australia currently has a giant mismatch between the number of jobs being created and the number of workers looking for a job.
The long-term unemployment that results comes with mental health problems, low motivation and drug and alcohol abuse.
The government thinks it can solve those problems with the stick, not the carrot – a ‘three strikes and you’re out’ penalty for missing appointments, and mandatory drug testing.
This is nothing more than red meat thrown to the minority of voters who would rather punish the jobless than help them.
Funny, because when one of Malcolm Turnbull’s key advisors was charged with, among other things, “possession of a drug of dependency” in 2015, the attitude was quite different.
Then-PM Tony Abbott said of that sorry incident: “… when people have personal issues, they should be given all the support and all the encouragement that they possibly can to work through those issues.”
Quite so. And being on the unemployment scrap-heap in your late teens or early 20s really does create ‘personal issues’.
Good with the bad
On budget night I praised the government for the large infrastructure spending plans, and job-creating incentives for small businesses, which together should help create tens of thousands of jobs to get young Australians into work.
Likewise, the bank levy – it is a small but welcome reversal of the perverse transfer of wealth created by the tax distortions mentioned above.
But despite those positives, hundreds of thousands of young Australians will feel under attack, even after spending countless hours looking for work, studying and working to get through university, or for daring to dream of a home of their own.
You don’t have to be young to realise that’s setting Australia up for a bleak future.